Digitalocean Holdings docn Shares Soar on Paperspace Acquisition News

DigitalOcean Holdings (DOCN) Shares Soar on PaperSpace Acquisition News

Shares of DigitalOcean Holdings, Inc. (NYSE: DOCN) soared 13.25% on Thursday following the announcement of its acquisition of PaperSpace for a hefty $111 million in cash.

This acquisition brings substantial benefits to customers of both organizations. Paperspace’s valued clientele will now have access to an expanded cloud services platform. In addition, they will enjoy the perks of DigitalOcean’s comprehensive documentation, tutorials, and support system, which will assist them in their journey to develop and deploy AI applications.

On the other hand, DigitalOcean customers, both those already involved in AI/ML application development and those exploring the field, will now be able to leverage GPUs alongside their CPU workloads. This collaboration between DigitalOcean and Paperspace aims to empower smaller businesses and startups with a holistic suite of cloud offerings. This includes advanced networking solutions and the flexibility to harness both GPU and CPU capabilities as AI/ML technologies continue to evolve and demand grows.

Paperspace, on the other hand, stands to benefit from DigitalOcean’s highly effective self-serve model and efficient go-to-market strategy. The acquisition presents opportunities for cross-selling and upselling, as both entities leverage DigitalOcean’s mature platform, efficient marketing engine, and extensive customer base to drive growth.

Financially, the acquisition is not expected to have a significant impact on the 2023 results. However, DigitalOcean will reveal further details about the strategic benefits of the acquisition and provide an updated financial outlook for 2023 during its Q2 2023 earnings call on August 3, 2023.